Earlier we wrote the article “F-rated Saxon Mortgage and calls from 800-594-8422 annoy homeowner” as seen here. Even after talking to Saxon Mortgage and parent company Morgan Stanley, Saxon Mortgage continues to call homeowners, even after the house payment was made. The company claims they are again offering a service. Specifically Saxon is giving the homeowner the ability to pay by Western Union. I’m not sure about Saxon, their attention to detail, or their ability to act like a professional organization as opposed to a predatory mortgage servicer.

Saxon needs a watchdog and homeowners need a consumer advocate. A new website, SaxonWatch.com is ready to give Saxon daily scrutiny which they truly deserve. The new website has published their legal position. Saxon Watch is not associated with Saxon Mortgage in any way.

Saxon Watch will give homeowners the tools necessary to file complaints directly from the website. Included in the Saxon Watch list of tools will be direct links to the OCC, FTC, Justice Department, BBB, elected representatives, the media, and the FBI racketeering tip line, among others.

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If the U.K. truly is a window to the future of U.S. economics the credit card industry must be on edge. Discover Card said this morning that it would take a charge to write off part of its Goldfish credit card business in Britain, where consumer credit has deteriorated. HSBC recently said they wanted to sell their Marbles credit card operation. Common sense tells us that credit cards will begin to sour, as did mortgages. On a related note, analysts finally admitted the so-called ’subprime’ crisis is not related entirely to people with spotty credit.

Five major banks control 80 percent of the U.S. credit card market, and if the U.K. is a good indication, when any of the five already have huge losses from ’subprime’ it will be a very bad 2008 when credit cards start to go bad.

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State Division of Banking offices examine the soundness and lending practices of licensed mortgage companies and are designed to prevent unscrupulous lenders and brokers from taking advantage of consumers. Watchdog organization Household – HSBC Watch called for a national database that would enable all states to coordinate data and perform trend analysis. “If an examiner sends a problem to a state Attorney General the AG’s office should be able to immediately see if the problem exists in the other 50 states” said the group.

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Barclays and HSBC are on different ends of the mortgage crisis but between them they lost $6 billion from their exposure to the U.S. housing crisis and related credit crunch. HSBC lost money because of U.S. mortgages going bad, and Barclays lost money because of collateralized debt obligations (CDO’s) based on U.S. mortgages. The process of putting together a mortgage pool begins when a home loan is originated by a bank or mortgage lender. That loan is typically sold to a Wall Street firm that pools it with thousands of others. Once a pool is packaged, it is sold to investors in different slices, based on risk. That is the CDO.

One should keep in mind that the U.K. mortgage market is not much better than the U.S. mortgage market. While some say the U.K. market is a bellweather that assumption is based on theories that the U.K. market is approximately 12 to 16 months ahead of the U.S. cycle. Analysts suggest that U.K. regulators did a much better job than U.S. regulators, but through it all Barclays and HSBC managed to lose $6 billion. The faint of heart must not look at the reset period for U.S. adjustable rate mortgages. We are just starting to see resets that should go on for two more years.

Why would HSBC and others actually work with borrowers to refinance their risky loans when the banks cannot sell the paper to investors? If a risky mortgage is already in a mortgage pool is there a tendency to refinance without altering the pool? If so, what happens to the chain of ownership and who actually has the deed to the property? What is the resulting impact of any future foreclosure, also known as repossession in the U.K.?

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Pooling of home loans into securities has been going on for decades and helped increase real estate prices in recent years as investors sought higher yields that such mortgage trusts could provide. Some $6.5 trillion of securitized mortgage debt was outstanding at the end of 2006. Mortgages are recorded in the MERS system. It seems the system is causing problems relating to true ownership of the properties.

Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize. All of the cases pertained to Deutsche Bank National Trust Company. The bank is trustee for securitization pools, issued as recently as June 2006, claiming to hold mortgages underlying the foreclosed properties. MERS is the mortgage electronic recording system.

The process of putting together a mortgage pool begins when a home loan is originated by a bank or mortgage lender. That loan is typically sold to a Wall Street firm that pools it with thousands of others. Once a pool is packaged, it is sold to investors in different slices, based on risk. A trustee bank oversees the pool’s operations, ensuring that payments made by borrowers go to the appropriate investors. At issue is whether the investor owns the home while the bank is merely the servicer.

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A review of investors with interest only loans shows they are still paying the bare minimum each month. For the average home owner with an adjustable rate mortgage the options are not as good. Many families are considering how to tighten up the budget, and paying off the credit cards might sound good. More aggressive borrowers are calling their credit card company with an ultimatum – either settle or less than the balance due or nothing at all. Debt settlements, and early credit card payoffs for less than the full amount due, come with high risks as negotiations begin.

We invite you to visit Settlement Scams, where you will see a multitude of sins you might never consider. Second tier scams, introduction scams, the offer becomes a proposal scam, less than the full quoted amount scams, and others provide interesting reading. If you want to negotiate with your credit card companies so you can make the higher payments on your mortgage you should become familiar with the pitfalls.

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Subprime mortgage anxiety continued to spread on Thursday as a leading derivatives index hit a new low and fears grew that Merrill Lynch and other banks could be forced into even bigger asset writedowns. Those fears drove Merrill Lynch shares down 4 per cent to $60.90 as analysts suggested the bank might need to take writedowns beyond the $8.4bn announced on Wednesday.

The writedown, which was $3.5bn more than Merrill had estimated, has led to questions about the bank’s risk management and the future of Stan O’Neal, chief executive. Risk management officers have been disappearing from the business lately, with some like HSBC’s David Gibbons leaving suddenly. Before joining HSBC Gibbons was with HSBC’s regulator, the Office of the Comptroller of the Currency.

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